Great blog describing an issue that tortures so many EALs.

After consolidating my outstanding loans with Direct Loans in 10/09, I was mailed correspondence at the end of 12/09 with four bulleted choices of repayment plans. 12/28/2009, I called Direct Loans and was advised by one of their representative as to the repayment plan that was the best choice for my loan and financial situation. She suggested the ten year standard repayment plan.

Luckily on a whim I called to check on the status of my loan 06/2011. To my horror I was told I selected the wrong repayment plan. After much debate and ‘escalation’ of the phone call it was finally determined that yes I called and yes a representative was the one who mislead me, and don’t worry she was fired, and yes too bad your 17 payments so far do not qualify. The Direct Loans supervisor then said I should change my repayment plan to IBR, but should hold-off until I hear from The Department of Education regarding if the payments already made will qualify.

I immediately wrote to the Department of Education explaining what had occurred. 08/2012 I mailed correspondence that my Direct Loan was transferred to FedLoan Servicing. August 16, 2012, upon contacting FedLoan, I was told by a representative they were to service the loans mishandled by Direct Loans. I sent all of the documents required, including the IBR application.

A few weeks later I was advised by Stephanie (1-855-265-4038 x3983) that she was personally handling the 300 borrowers who caught Direct Loans mistake. She happily informed me that out of the 300 borrowers, I was lucky because I have the highest number of qualifying payments: 17. The problem here is that I’ve made 34 payments since my inception with the PSLF! Her advice was to write to The Department of Education because they are the one who came up with the mathematical formula for figuring out the amount of payments made that FedLoan Servicing may qualify.

I am not a mathematician, but I can easily tell you that the Dept. of Ed.’s formula is, at best flawed, but certainly favorably one-sided. Here’s how: Each year I’ve grossed (slightly) more money than the previous and thusly have paid down any debts. Currently my IBR payment is $216 per month. Since 12/2009 Direct Loans has directly debited my account each month in the amount of $239.

When I remarked to Stephanie that this has class action lawsuit written all over it she replied, “You’re no the first of the 300 borrowers to say that, just the one who put it as pleasantly as you.” I quietly explained it was 24 hours since an emergency appendectomy and she was reaping the benefit of pain medication and weakness.

Oh, and why are just 300 borrowers being given consideration? Great question, I asked that too to Stephanie. Her reply:”You’re the only ones who caught the mistake. The window of opportunity closed in July 2012, and the others won’t be able to ask us to accept any qualifying payments.” I told her that wasn’t fair, The Department of Education’s hiring of FedLoan Servicing is a clear indication of their acknowledgement that Direct Loans screwed up and screwed others, thereby admitting they are at fault. All she said was, “Yeah, you’re not the first person to point that out to me either.”

But as we’ve all been told, the pen is mightier than the sword, so let’s see! You may contact me at hayes13@hotmail.com